Quick Take
- 64% of developers say unreasonable investor expectations caused the current gaming market slump
- Multiple founders push back, pointing to market shifts and high development costs
- 2025 shows slight signs of improvement in early-stage funding, but Series A remains tight
Are Game Investor Expectations Fueling the Industry’s Slowdown?
New data suggests developers are blaming investor pressure for the ongoing crisis in the video game industry.
According to The Game Developer Collective, 64% of surveyed game developers named “unreasonable investor expectations” as the top reason for worsening market conditions. The data, collected in partnership with analyst firm Omdia, reflects developer sentiment across studio sizes and platforms.
“Investors have been propping up some of the game industry given the withdrawal of platform funding and the collapse of game publishers,” said AstroBeam CEO Devin Reimer, noting that conditions are more complex than a single cause. Reimer previously co-founded Owlchemy Labs, where it took four original games before finding a hit.
Respondents in the survey also cited mismanagement (60%) and rising development costs (43%) as major contributors. The conversation follows years of declining margins, mass layoffs, and delayed launches across nearly every sector of the gaming business.
Pushback from Founders and Funds
Not everyone agrees with the framing.
Jake Solomon, founder of Midsummer and former creative director of Firaxis’ XCOM and Midnight Suns, said the criticism oversimplifies the venture capital model. “You are expected to not just make a great game, but a transformational one,” he said, adding that VCs often provide full funding up front without demanding creative control.
Jason Della Rocca, a partner at Griffin Gaming Partners, argued the inverse is more accurate. “It is the market conditions that are driving investor expectations,” he said. He called on studios to adopt “audience-first” thinking to attract funding in a more cautious environment.
Reimer also described a structural mismatch between how studios operate and how investors fund. “Successful studios generally need to launch many games before they get a hit,” he said. Traditional publishing models align better with this, as they fund per-game rather than take equity in a studio based on a single title.
Slight Thaw in Funding Access
While general market conditions remain poor, developers are reporting a marginal improvement in 2025.
In the new report, 50% of respondents said it was harder to raise money this year compared to 2024 dropping from 73% the year prior. More developers described conditions as unchanged (27%) and fewer said it was easier (6%).
Della Rocca suggested the shift may reflect a move toward “evidence-based investing,” where proof of player interest helps secure capital. The challenge, he said, is a lack of prototype-stage funding to reach that validation.
Solomon agreed that the seed stage has opened slightly but said Series A is still frozen. “Valuations probably feel too high, exit events are few, and examples of good investment bets in games are not plentiful,” he said.
Moving Forward
As the funding environment adjusts, some are advocating for a new model. Reimer believes investors could reduce risk by backing a studio’s first two games, not just one. That would help increase the odds of discovering a hit, but it requires larger upfront capital in a market that remains skeptical of long-term bets.
The survey paints a picture of a shifting ecosystem. Developers are more wary, investors more cautious, and the expectations in between remain unsettled.
